Planning Your Legacy

Your First Aid Kit

Like most families, I keep a First Aid Kit in my home… just in case. If some part of my daily plan goes awry (the slip of a knife while chopping vegetables for dinner, the onset of a migraine, a clumsy misstep walking upstairs, etc.), I simply reach into my First Aid Kit to find the appropriate equipment or medicine. I can never be sure if I’ll find myself in need of a bandage, a pain reliever, gauze, or a cold compress.

Now let’s think of your Estate Plan as your “Legal First Aid Kit.” Imagine having a need for a legal bandage, only to reach into your Legal First Aid Kit and find that it is empty. You realize that you aren’t prepared with the necessary equipment to maintain control of your health and your assets. Unfortunately, if the Legal First Aid Kit isn’t already full by the time you need it, it may be too late.

What is Estate Planning?

Estate Planning is the process of establishing a game plan during your lifetime for the distribution of your estate, which is simply the net sum of all that you own. For many people, the term “Estate Planning” is taboo. It’s no wonder that many procrastinate in this area – estate planning forces you to face your own mortality and it serves as incredibly bleak cocktail party conversation. However, estate planning can be one of the most selfless things you can do for your loved ones. Without the proper planning, family disputes are more likely to occur over estate distribution. If you die without a will, also known as dying “intestate,” state law dictates your estate settlement; and the state laws may not distribute your assets the way you wish. When you die without any sort of plan, your wishes are irrelevant.

The Basics

 The basic contents of your Legal First Aid Kit are:

1. Will – The will is the document that outlines how you want your probate estate distributed after death. Your probate estate consists of any assets that pass through your will via the probate process. Assets with a named beneficiary do not pass through the will, and therefore, are not subject to probate; if an asset has a named beneficiary, the beneficiary designation supersedes the will. There are also certain forms of property ownership that supersede the will, such as “Joint Tenants with Right of Survivorship.” When property is owned in this fashion, the surviving owner automatically receives the deceased owner’s share without regard for the will.

Accordingly, it is important to note that the will does NOT necessarily dictate how your entire estate will be distributed. Let’s say that you want your entire estate to be inherited by your children. If you’ve indicated in your will that you want absolutely everything to go to your children, but you’ve designated your spouse as the beneficiary of your 401(k) plan, then your estate plan is not in line with your objectives. The 401(k) plan will go directly to your spouse, NOT to your children.

2. Health Care Directive – This document plans for your incapacity while living. It outlines what medical care you wish (or do not wish) to receive in the event of your incapacity. It also names an agent to make medical decisions for you. Without a Health Care Directive, you have little or no control over what care you are given or who makes your decisions with respect to healthcare.

3. Durable Power of Attorney –This document allows you to designate family members or other trusted individuals to make financial decisions on your behalf. Essentially, the durable power of attorney allows you to transfer decision-making power to another individual without disrupting your estate plan. It is key that the individual to whom this power is given is, in fact, a trusted individual. Although the courts can intervene to deal with individuals who abuse this position of power, the damage is typically done prior to this intervention.

An important component of this planning process is regular review. A good rule of thumb is to revisit your Estate Plan every 5-7 years to ensure that the plan still accomplishes your objectives, taking into consideration changing laws and the development of new planning strategies.

There may be alternatives to the above strategies that are more suited to your specific needs, and I encourage you to consult a financial or legal professional to develop a plan customized to your needs and desires.

More than Money

We know that Estate Planning has many benefits, including getting you organized in the event of incapacity or death, providing a smooth estate settlement for your heirs, and in some instances providing great tax advantages. And if those benefits alone don’t spur your ambition to review your estate plan, then I encourage you to see estate planning in a much deeper, more meaningful light. Instead of thinking in terms of “preparing for death,” try thinking about these issues:

1. What kind of life do you want for your children or grandchildren?
2. How do you want your charity to remember you?
3. Am I taking steps toward leaving the legacy I want to leave?

Estate Planning can trigger a thought process that goes beyond your tangible assets. Planning your legacy is much more than the dollar amount your family and friends receive as an inheritance. How you live your life today builds the legacy you will leave tomorrow. How do you want to be remembered?


Ali Bach, Certified Financial Planner©
Conte Wealth Advisors

Registered Representative Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Conte Wealth Advisors are not affiliated. 2009 Market Street, Camp Hill, PA 17011.